Japan may open $120 billion drugs market further

The Japanese government might allow seriously ill patients to use medical treatments not yet approved in Japan under a "compassionate use" system, adding to signs the country is opening the door further to foreign pharmaceutical companies.

Japan has been traditionally slow to approve new treatments developed overseas for its US$96 billion (S$120 billion) drug market, the world's second largest, due in part to safety concerns.

But the government has recently taken steps to speed up the approval process and gain access to better treatment as it seeks to cut healthcare costs for its rapidly aging society, creating business opportunities for western drugmakers.

Japan is considering allowing the use of drugs and medical devices that have already been approved in places such as the United States and Europe and which are undergoing clinical trials in Japan, said Toshio Miyata, assistant director at the licensing division of the Pharmaceutical and Food Safety Bureau.

The compassionate use programme, similar to ones already in place in western countries, would be for patients with advanced diseases that have not responded to standard treatments and where other domestic options are not available.

Miyata told Reuters that the government hopes to submit legislation to parliament as early as this year, although no timeframe had been set and many details needed to be worked out.

Time would be needed to prepare regulatory approvals and insurance coverage under Japan's universal healthcare system.

The Nikkei newspaper reported that the government may allow health insurance to pay for some of the costs patients might incur under the compassionate use" system. But Miyata said nothing had been decided. In Japan, patients normally foot the bill themselves for non-approved treatments.

The Nikkei cited cancer drugs Zanosar, a tumor fighter made by privately held French firm Keocyt, and Firmagon, a hormonal therapy for advanced prostate cancer made by unlisted Switzerland-based Ferring Pharmaceuticals, as examples of treatments available abroad that have not yet been approved in Japan. Miyata would not discuss specific drugs.

Western drugmakers are seeking to expand their presence in Japan, considered an increasingly important country with its large middle-class and aging population and better profit margins than those seen in emerging markets.

Last year, Merck & Co, AstraZeneca Plc and GlaxoSmithKline Plc each won approval to sell some of their drugs in Japan.

Britain's Glaxo announced this month it would form a 50-50 joint venture with Daiichi Sankyo to bring new vaccines to Japan, targeting an underdeveloped segment of the overall market.

Japan's government also aims for generic drugs to make up 30 per cent of the market by the fiscal year ending in March 2013 from about 20 per cent in 2010, prompting the likes of Pfizer Inc and Israel's Teva Pharmaceutical Industries to enter the market.